A British expatriate shot his wife before turning the gun on himself at their luxury home in Spain in what police yesterday said was a murder-suicide.

Police named the couple as David and Heather Rouse, who lived in San Fulgencio near Alicante on the Costa Blanca. He was in his 70s and his wife in her 50s. A neighbour alerted the police at about 11.30pm on Sunday after hearing a strange noise, the Alicante civil guard said.

"It seems the main reason was the husband had some kind of terminal cancer and wanted to finish the story," a police spokesman said.

Friends of the couple said doctors had recently diagnosed Rouse with terminal cancer. He had also suffered two strokes.

Officers had found medical notes in the house that revealed his illness. Rouse left water and food for the couple's pet dog and cat, placed his identification on a table and left the front door open before taking his own life, according to police.

A police source said: "Mr Rouse appears to have planned the crime meticulously. He left documents out identifying himself and left food and water for the pets. The officers found both bodies in the bedroom. Mrs Rouse had been shot in the head with a shotgun as she slept. Mr Rouse had then used a long stick to fire the trigger of the shotgun and kill himself. Everything points to a murder-suicide although no note was found."

Friends expressed bafflement at the couple's death as they had only recently booked a holiday cruise and Rouse had been due to pick up his sister from the airport yesterday. His sister arrived to be met by officers who broke the news to her.

The couple moved into their five-bedroom villa near the town of San Fulgencio, south-east of Alicante, eight years ago. The house, set in three-quarters of an acre of grounds lined with palm trees is worth about £800,000. Rouse, reportedly a millionaire, recently put the home on the market.

A post-mortem was carried out yesterday and the civil guard is investigating.

"It is a terrible tragedy that has shaken up the town," said Trinidad Martinez, the mayor of San Fulgencio. "They were a very well-liked couple who were popular with neighbours."

She added: "There was never any suggestion of any kind of domestic abuse. The husband had suffered from a series of strokes and may have been suffering from depression. However, he had seemed in better health recently. His sister arrived at the airport and was horrified when she was told the news by officers from the civil guard. Our thoughts are with both families at this time."

San Fulgencio is home to many expats, particularly Britons, who make up almost half of its population of 8,000. Last year a British expat, Mark Lewis, who speaks only a smattering of Spanish, took over as mayor after the previous mayor, deputy mayor and four senior councillors were arrested on charges of corruption.